The Accelerator Theory Describes the Impact Of

question 29

Multiple Choice

The accelerator theory describes the impact of:

• A) a change in future GDP on investment.
• B) a change in government spending on future GDP.
• C) a change in planned aggregate expenditures on future GDP.
• D) a change in investment on future GDP.

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Definitions:

Recessions

Periods of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Depressions

Extended periods of significant decline in economic activity across an economy, characterized by high unemployment, falling prices, and reduced levels of trade and investment.

Price Increases

Price increases refer to the rise in the cost or value of goods and services over time, often measured by inflation rates.

Depression

A prolonged period of significant decline in economic activity and employment, more severe than a recession, marked by long-term unemployment and financial distress.